Maybe they’ve been living there for years, paying rent on time. The renter calls it home, but ticking time bomb is a better description.
The renter often doesn’t know that the house has gone into tax foreclosure and that the property has been put up for sale at a tax auction. When a structure has gone to auction at least twice and not sold, it becomes tax forfeited. This means that the property is now owned by the State of Ohio. Since the state isn’t routinely in the business of residential rentals, the property most likely will be sold again.
Anywhere along this path, beginning with tax foreclosure, tenants could potentially and unexpectedly find themselves without a place to live.
Our first priority is to occupants living in homes where their landlords neglected their tax obligations
Ayonna Blue Donald, vice president and Ohio Market Leader for Enterprise Community Partners, one of the partners of Make It Home Cleveland
A new program, slated to begin later this spring, seeks to end such a scenario based on a Cleveland reality. Tax forfeiture has played a role in destabilizing families and neighborhoods, especially on the city’s East Side, the program’s partners say. The Make It Home Cleveland program will give renters living in 50 tax forfeited properties the opportunity to buy and repair such homes. The program will do this by offering a range of services including one-on-one financial and housing counseling, access to home repair grants and low-interest loans and legal aid assistance.
People won’t be able to apply for Make It Home. Representatives from the City of Cleveland and the Cuyahoga Land Bank, which inspects and markets tax forfeited properties, have identified occupied homes that have been forfeited to the state. The occupants could include renters, the former homeowner or a family member living in a house that was never probated after the owner died. The City and the land bank are program partners.
Ayonna Blue Donald, vice president and Ohio Market Leader for Enterprise Community Partners (Enterprise), a national nonprofit focused on affordable housing and another of the Make It Home partners, said the program is targeting a certain type of occupant.
“Our first priority is to occupants living in homes where their landlords neglected their tax obligations,” she said.
The program will be centered in East Side neighborhoods.
“The targeted program is focused on improving housing and neighborhood stability on the East Side of Cleveland, where over 78% of tax delinquent properties are located and Black homeownership rates are disproportionately low,” states the news release announcing the Cleveland program.
Make It Home is based on a similar program started in Detroit in 2017 by the Rocket Community Fund, which is also a partner in the Cleveland program. The fund is the philanthropic foundation related to Detroit-based Rocket Mortgage. Last year, Rocket Community Fund gave $1.25 million to the Cleveland Eviction Defense Fund. The eviction defense fund heavily lobbied for Cleveland’s 2019 Right to Counsel law guaranteeing that people facing eviction can have a lawyer when they go to housing court.
“Displacement negatively affects everyone – uprooting families while creating vacancy that drives blight and instability,” said Laura Grannemann, executive director of the Rocket Community Fund, in the news release. “Building on valuable lessons learned from running Make It Home in Detroit, we’ve developed a program tailored to Cleveland residents that disrupts this cycle by creating and supporting new homeowners.”
Make It Home in Cleveland has received $2.9 million in funding. This includes $1.5 million from Cleveland in American Rescue Plan Act (ARPA) funding and $700,000 from Rocket Community Fund.
In addition to the partners, the program will rely on the expertise of some Cleveland-area organizations. They include the Northeast Ohio Coalition for the Homeless, which will do outreach to occupants in tax forfeited properties. CHN Housing Partners will do the housing counseling, and the Legal Aid Society will provide legal help.
If what occurred in Detroit is any indication, Make It Home holds promise to grow in Cleveland. In Detroit, the program has helped 1,500 families buy homes. These Detroiters have been offered the right to purchase homes at tax auction for an average of $10,000. Cleveland residents may end up paying less since the homes they live in have already failed to sell at a tax auction and ended up being forfeited to the state.
“What’s unique about the Cleveland program is that because these are tax forfeited rather than tax foreclosed, the Cuyahoga Land Bank can work with the new owner to acquire the property at a minimal acquisition cost,” Donald wrote in an email to Signal Cleveland. “It will be case by case depending on the cost of title insurance and closing costs, but it will be less than the $10,000 average for Detroit.”